Report author Joshua M. Frank’s study and statistical analysis found that a pattern exists in which higher late fees are designed to yield issuer profits, but not to deter customer behavior for missed payments or serve to cover their losses. Late fees are just another way to raise costs on credit card customers.

“A Just Fee or Just a Fee?” reveals that:

Issuers that resort to combining multiple deceptive or aggressive pricing practices tended to charge higher fees. Nine of the 10 best predictors of late fees fell into this category.

Issuers that are aggressive in areas outside of pricing tended to charge higher late fees. Ploys like cash advance checks or aggressive collection tactics accompany higher late fees.

Credit losses are a very weak predictor of late fee amounts imposed on the consumer. When other variables were included in the statistical analysis, higher risk was not correlated with higher late fees.